Monday, January 30, 2012

OK's Grand Experiment - A New Era?

Oklahoma is moving forward with is most likely one of the biggest social experiments since the invention of workers' compensation 100 years ago, with some very powerful political backing.

Senate President Pro Tempore Brian Bingman, R-Sapulpa, and Speaker of the House of Representatives Kris Steele, R-Shawnee, will take the lead on Senate Bill 1378, the “Oklahoma Employee Injury Benefit Act.”

The act would give employers the option of establishing and managing a benefit plan that complies with the federal Employee Retirement Income Security Act (ERISA) instead of purchasing workers’ compensation insurance.

Not all employers would be able to participate in this optional plan.

SB 1378 would allow an employer to choose to be exempt from the Workers’ Compensation Code only if the employer has 50 or more employees, had claims greater than $50,000 in at least one of three preceding years, and establishes an alternative benefit plan that qualifies under the legislation. The bill also states only employers with an experience modification greater than 1.0 would be allowed to participate, but there is a question as to whether this was a drafting error.

A qualified benefit plan must provide for 100% of medical expenses and pay 80% of pre-injury income for temporary inability to work -- for up 156 weeks -- and 80% of pre-injury income for permanent inability to work for the later of 15 years or eligibility for 100% of Social Security retirement benefits.

Under the proposed legislation, an employer would be required to have an ERISA plan with specified benefits to become a “qualified employer.”

A qualified employer’s liability under the benefit plan would be exclusive for occupational injuries “in all cases except death,” the bill states.

Presently Texas is the only state that permits employers to not participate in workers' compensation, but there are no minimum requirements for an employer to do so - that's why in Texas "non-subscription" (i.e. not subscribing to the workers' compensation system) is sometimes also referred to as "going bare" - referring to the lack of legal and insurance protection should an employer choose not to participate in workers' compensation.

According to the WorkCompCentral News this morning the bill has the support of the Oklahoma State Chamber but labor as yet has not weighed in whether it supports or opposes the bill.

The Oklahoma Legislature will convene Feb. 6.

Will this experiment provide benefits to both employers and employees? Time will only tell obviously, but I believe that if Oklahoma's alternative plan fulfills its author's goals of providing “a fair and balanced alternative” to workers’ compensation, one that both employers and employees can embrace, a new era in socially responsible employment protection systems will blossom.

If the experiment fails - if either employers don't see savings or employees see a denigration of work place safety and injury protections - then this alternative will go no further than the state borders of Texas.workers compensation, work comp, injured worker 

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